In New York, a good example would be Triborough Bridge Authority bonds which use the tolls paid by cars entering and leaving New York City to service the annual interest payments owed investors.
Buying bonds backed by the full faith and credit of a governing authority and revenue bonds backed by sewer and water are the safer than bonds for private-public projects that require a business to make money to pay back debts.
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Veteran muni bond manager Barnet Sherman of Braintree Capital Partners says that an even better buy exists in the recently issued New Jersey Educational Facilities Authority Revenue Refunding Bonds due in 2032.
One is greater fiscal integration, including a joint fiscal authority, the issuing of common bonds, and the ability to make fiscal transfers to regions hit disproportionately hard by recession.
There are New York State Dormitory Authority Personal Income Tax (PIT) revenue bonds.
Lloyds TSB was not the only seller of these so-called precipice bonds, but the Financial Services Authority (FSA) thinks it was particularly aggressive at it.
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The Schwab California AMT Tax- Free Money-Fund, with a tempting 3% yield (net of a 0.45% expense ratio), contains, according to the latest published portfolio, a significant chunk of revenue bonds--meaning bonds not backed by the taxing authority of a state or local government.
When the state agency, the Iowa Finance Authority, first began issuing Midwestern Disaster Areas Bonds for firms in 2009, a company had to prove it suffered a loss in business or damage because of the floods, or was replacing a business that was hurt.
The monetary authority, says Mr Miller, should sell convertible bonds which, if denominated in Hong Kong dollars, carry an option for the holder to convert into American dollars at the set rate.
Eventually, she rose to senior managing director at Bear Stearns, working in municipal finance and helping the Denver International Airport, the New York State Thruway Authority and other public entities to sell tax-exempt bonds.
Examples: University of Texas munis, due August 2030, bought at 5.8% yield to maturity, and bonds issued by New York City Transitional Finance Authority, due November 2027, bought at 5.75% yield to maturity.
Stay with essential-purpose revenue bonds, whether it be a water and sewer authority or a highway authority, something like that.
No wonder, barely five years ago, that the city was on the verge of insolvency, rescued only by bonds issued by the Pennsylvania Intergovernmental Co-operation Authority, a state agency set up to supervise the city's finances.
All the government bonds in those trust funds are just a statement of the legal authority that Social Security has to draw from general revenues to pay Social Security benefits.
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